We The Sheeplez- The Coming Economic Collapse.."A Nation Of Sheep Ruled By Wolves" Thomas Jefferson

Greek Bonds Slump As Austerity Backfires, Country Enters "Death Spiral", And The Violent End Game Approaches

Submitted by Tyler Durden on 08/18/2010 11:58 -0500

Those patiently following the Greek Bond-Bund spread to its inevitable conclusion have been fully aware that the plan that Europe is betting its entire future on, is patently flawed: namely that austerity, by its definition does not, and will not work. In fact, instead of bringing stability, austerity will slowly but surely eat away at the economy of whatever country it is instituted in - in some cases slowly, in others, like Greece, very rapidly. Indeed, the Greek spread has now risen to levels last seen during the early May near-revolution in Athens, at well over 800 bps. And for the specific consequences of austerity, Germany's Spiegel has done a terrific summary of what it defines as a "death spiral" for the Mediterranean country: "Stores are closing, tax revenues are falling and unemployment has hit an unbelievable 70 percent in some places. Frustrated workers are threatening to strike back. A mixture of fear, hopelessness and anger is brewing in Greek society." Spiegel quotes a a typical Greek: ""If you take away my family's bread, I'll take you down -- the government needs to know that. And don't call us anarchists if that happens! We're heads of our families and we're desperate." All those who think violent strikes in the PIIGS are a thing of the past, we have news for you. The (pseudo) vacation season is over, and millions of workers are coming back. They may not have money, but they have lots of free time, lots of unemployment, and even more pent up anger. Things are about to get very heated once again, first in Greece, and soon after, everywhere else.

Jeremy Siegel Warns of Bond Bubble
Economist Jeremy Siegel and Wisdom Tree research director Jeremy Schwartz say there's a bubble brewing in the bond market that will cost investors dearly.

Saxo Bank Quarterly Outlook: "The Crisis Is Not Contained"

Malaysian Province Moves To Gold And Silver-Based Currency In "Main Islamic Event Of The Last 100 Years"

Submitted by Tyler Durden on 08/17/2010 22:36 -0500

More world governments are "just saying no" to the ponzi. Last week, the Malaysian government of Kelantan "said it was introducing a new monetary system featuring standardised gold and silver coins based on the traditional dinar and dirham coins once used by the Ottoman Empire." And as everyone who has taken game theory 101 knows, the first defector wins the most, while the last one is left with nothing. A small province in Malaysia just made the critical first defection. The question now is who will be next... and next...and next.

Jim Sinclair’s Commentary
Chinese demand for gold is a physical demand which will reveal itself in the comparison of COMEX near delivery contract price and the cash market price.
As they close in on each other that says physical demand. If it ever goes to backwardation then Asia is in charge.
Backwardation, in this case, is a cash physical market bid above COMEX near delivery month. At that point the physical market is in charge of the futures market for gold, a unique currency.
Such a market development, when it occurs, is extremely bullish in the unique market for gold.

Profiting From the Chinese Gold Rush Jim Trippon
China’s first gold rush is underway. I mentioned in my article how big the coming stampede is.
If you haven’t already read about it then read these bullet points. Changes in China will make 2010 a golden year for investing in gold:
1. China is actively promoting consumer investment in gold
2. China will let many more banks import and export gold for consumption
3. China will also open gold trading to foreign companies in China
4. China is going shopping globally for "large scale" new gold sources
5. Beijing is helping to create new consumer products to boost demand
6. China is stockpiling more gold in its reserves
There are plenty of good reasons why Beijing believes that now is the time for China to go for the gold.
For investors, the important fact is that China will push up global demand. Even though China is the world’s largest gold producer it cannot mine enough of its own ore. China had to import 100 tons of bullion a year even before Beijing’s latest gold drive. The new demand from China will drive gold prices higher worldwide. The important starting point is gauging just how much demand the Chinese will add to the global market.
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Jim Sinclair’s Commentary
QE to infinity. It’s the covert QE that really rocks.
The Fed plans to purchase Treasuries due from August 2016 to August 2020 tomorrow, after purchasing $2.551 billion of securities yesterday to spur the economy by keeping borrowing costs low.

Treasury Yields Near 17-Month Low; Bullard Considers Purchases August 18, 2010, 7:12 AM EDT
By Matthew Brown and Wes Goodman
Aug. 18 (Bloomberg) — Treasury 10-year yields were near a 17-month low after Federal Reserve Bank of St. Louis President James Bullard said the central bank may need to buy more Treasuries if inflation continues to slow.
The Fed plans to buy Treasuries due from August 2016 to August 2020 tomorrow, after purchasing $2.551 billion of securities yesterday, to hold borrowing costs down. There has been “disinflation,” Bullard, who votes on monetary policy this year, told the Wall Street Journal yesterday. “We should have a plan in place to take action if it moves lower.” German 30-year bond yields reached a record low and Japanese 10-year yields dropped to their lowest in seven years.
“There is still concern on the strength of the recovery, and the risk is that the Fed will expand its balance sheet with further purchases, and that’s giving Treasuries support,” said Orlando Green, assistant director of capital markets strategy at Credit Agricole Corporate & Investment Bank in London.
The 10-year note yield fell two basis points to 2.61 percent as of 6:38 a.m. in New York, according to BGCantor Market Data. The 2.625 percent security due August 2020 rose 7/32, or $2.19 per $1,000 face amount, to 100 3/32. Yields dropped to 2.56 percent on Aug. 16, the lowest since March 2009.
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Jim Sinclair’s Commentary
Currency induced cost push inflation along with hot/dry long weather cycle cost induced food inflation is here and growing.
The economically blind liberal jerks and demonic derivative dealing fools simply cannot see it.

Wal-Mart Quietly Raises Prices By JONATHAN BERR Posted 11:30 AM 08/10/10
Wal-Mart Stores (WMT), which for years has touted its prowess at lowering prices, has been doing the opposite as it tries to bolster its bottom line amid stagnating sales.
A JPMorgan Chase (JPM) study of a Walmart Supercenter in Virginia found that the world’s largest retailer has raised prices by nearly 6% on average over the past six weeks, according to the New York Post. Reuters says it was the biggest sequential increase since JPMorgan started the study in January 2009.
Some Prices Hiked Over 60%
Some of the price hikes were considerably larger. For instance, the price of a 32-ounce bottle of Windex household cleaner jumped 50%, a 12-ounce box of Quaker Oats instant grits climbed 65% and a 50-ounce container of Tide detergent rose by more than 50%. A spokesperson for the Bentonville, Ark., company could not immediately be reached for comment.
The results of the price-hike study aren’t entirely surprising. Shares of Wal-Mart, which rose at the height of the recent recession, are down more than 2% this year amid lackluster performance at its U.S. stores, where same-store sales fell 1.1% during the 13 weeks ended April 30. When Wal-Mart announced a revamping of the management team overseeing these stores, including the departures of CEO and President of Wal-Mart U.S. Eduardo Castro-Wright and Chief Merchandising Officer John Fleming, current Wal-Mart U.S. CEO Bill Simon bluntly said, "our mandate is clear: increase customer traffic, make sure our products are relevant to our customer and never give an inch on price leadership."
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Deflation: To Be Or Not To Be

Posted: Aug 18 2010 By: Jim Sinclair Post Edited: August 18, 2010 at 2:33 pm
Filed under: General Editorial
Dear CIGAs,
As Martin Armstrong says herein, what is coming is more sinister and less understood than the 1929 economic model.
The fact is it is coming without any doubt. Gold is the only insurance against this insidious currency driven event.
The three illustrations below Armstrong`s article are in fact not cartoons. These are teaching illustrations of the aforementioned insidious event on the horizon which is coming extremely fast. I estimate one out of a million people understand the implications.

Click any of the first three images below to open Armstrong’s latest in PDF format